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HomeMy WebLinkAboutBond Purchase Agreement Exh B BOND PURCHASE AGREEMENT BETWEEN CITY OF REXBURG, MADISON COUNTY, IDAHO AND PURCHASER $______________ PAR AMOUNT CITY OF REXBURG MADISON COUNTY, STATE OF IDAHO WASTEWATER REVENUE REFUNDING BOND SERIES 2020 DATED JUNE 22, 2020 BOND PURCHASE AGREEMENT June 22, 2020 City of Rexburg Mayor and City Council 35 N. 1st E. P.O. Box 280 Rexburg, Idaho 83440 Dear Mayor and City Council: The undersigned, __________________ (the “Purchaser”), hereby offers to enter into with the City of Rexburg, Madison County, Idaho, an Idaho municipal corporation (the “Issuer”), this Bond Purchase Agreement (this “Agreement”). This Agreement authorizes the purchase by the Purchaser of your Series 2020 Bond described below. This Agreement is made subject to acceptance by the Issuer. Upon such acceptance, this Agreement shall be in full force and effect according to its terms and shall bind the Issuer and the Purchaser. If not so accepted, this Agreement will be subject to withdrawal by the Purchaser upon notice delivered by the Purchaser to the Issuer any time before the acceptance hereof by the Issuer. Purchase and Sale. Subject to (i) the satisfaction by the Issuer of the terms and conditions set forth herein, (ii) the conditions precedent set forth herein and in reliance upon the representations herein set forth or incorporated herein, the Purchaser hereby agrees to purchase, upon the terms and conditions set forth herein, in Exhibit A attached hereto, the City of Rexburg Wastewater Revenue Refunding Bond, Series 2020 in the aggregate original principal sum of $____________, (the “Bond”). The Bond shall be as described in Exhibit A attached hereto, and shall be issued and secured pursuant to Ordinance ____________ of the Issuer adopted on May 6, 2020 (the “Ordinance”) approving the issuance of such Bond. This Agreement shall constitute the Loan Agreement authorized by, and as defined in, the Ordinance. 2. Representations. The Issuer represents to and agrees with the Purchaser as follows, provided, however, that the representations contained in the subparagraphs (3) and (4) below are based solely upon the opinion of Bond Counsel rendered in accordance with Section 4.D.1. hereof: 1. The Issuer is a municipal corporation and political subdivision organized and existing under the Constitution and laws of the State of Idaho, and the Issuer has full legal right, power, and authority pursuant to the Constitution and laws of the State of Idaho, to sell and deliver its Bond for the purpose of refinancing a certain portion of its Wastewater Revenue Promissory Note, Series 2010. 2. To the knowledge of the Issuer, the execution and delivery of this Agreement does not, and the execution and delivery of the Bond and the adoption of the Ordinance and compliance with the provisions of each of them, under the circumstances contemplated thereby, will not, in any material respect, conflict with or constitute on the part of the Issuer a breach of or default under any other agreement or instrument to which the Issuer is a party or any existing law, administrative regulation, court order or consent decree to which the Issuer is subject. 3. Based solely upon the opinion of Bond Counsel, the Bond when duly issued, authenticated, delivered and paid for in accordance with the Ordinance and purchased by the Purchaser as provided herein, will be the validly issued and outstanding revenue bonds of the Issuer. 4. Based upon the opinion of Bond Counsel, the Ordinance, and this Agreement, when each of them has been executed and delivered by the Issuer, will, assuming due authorization, execution and delivery by all other parties thereto, each constitute a valid and binding obligation of the Issuer, provided, however, that the enforceability of such obligations may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights heretofore or hereafter enacted to the extent constitutionally applicable, and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases and to general principles of equity. 5. To the knowledge of the Issuer no litigation is pending or, threatened against or affecting the Issuer and to which the Issuer is a party (i) seeking to restrain or enjoin the issuance or delivery of any of the Bond or the application of proceeds of the Bond as provided in the Ordinance or the collection of revenues of the Issuer pledged under the Ordinance, (ii) in any way contesting or affecting any authority for the issuance of the Bond or the validity of the Bond, the Ordinance or this Agreement, or (iii) in any way contesting the existence or powers of the Issuer. 3. Closing. On June 22, 2020, or such later date as we mutually agree upon (the “Closing”), the Issuer, subject to the terms and conditions herein, will deliver or cause to be delivered, at the offices of the Purchaser or other such place as may be mutually agreed upon, the Bond, duly executed and authenticated. In addition, the other documents hereinafter mentioned will be delivered at the offices of Bond Counsel and the Purchaser will accept such delivery and pay the purchase price thereof in federal funds to the account of the Issuer. 4. Conditions Precedent. The Purchaser has entered into this Agreement in reliance upon (i) the representations, warranties and agreements of the Issuer contained herein and in the Ordinance and (ii) the performance by the Issuer of their obligations hereunder, if any, and under the above mentioned documents, both as of the date hereof and as of the date of the Closing. The Purchaser’s obligation under this Agreement is and shall be subject to the following further conditions: A. The representations and warranties of the Issuer contained herein shall be true, complete and correct on the date of acceptance hereof and as of the date of Closing with the same effect as if made on the date of Closing. At the time of the Closing, the Ordinance shall be in full force and effect, shall be in form and substance acceptable to the Purchaser in all respects, and shall not have been amended, modified or supplemented except as may have been agreed to in writing; and shall have duly adopted or entered into and there shall be in full force and effect, such Ordinances and agreements, as, in the opinion of Bond Counsel shall be necessary in connection with the transactions contemplated hereby or the documentation of security for the Bond. C. The Purchaser may terminate this Agreement by notification in writing to the Issuer if at any time subsequent to the date hereof and at or prior to the Closing: (i) legislation shall be enacted by, or favorably reported out of committee to, either House of the Congress of the United States, or a decision by a court of the United States shall be entered or a regulation or ruling shall be issued or proposed by or on behalf of the Treasury Department, the Internal Revenue Service of the United States, or any other agency of the federal government having jurisdiction, with respect to federal taxation upon interest received on obligations of the character of the Bond or the sale, at the contemplated offering prices, by the Purchaser of the Bond; or (ii) a stop order, ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission shall be issued or made to the effect that the issuance, offering, sale or distribution of obligations of the character of the Bonds is in violation or any provision of the Securities Act or the Trust Act of 1939; or (iii) the Congress of the United States shall enact a law, or a bill shall be favorably reported out of committee of either House of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission or any other agency of the Federal government having jurisdiction of the subject matter shall be made, to the effect that securities of the Issuer or of any similar public body are not exempt from the registration, qualification or other requirements of the Securities Act or the Trust Act of 1939; or (iv) the United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency; or (v) there shall have occurred a general suspension of trading on the New York Stock Exchange; or (vi) a general banking moratorium shall have been declared by the United States, State of New York or State of Idaho authorities; or (vii) an event shall occur which in the reasonable judgment of the Purchaser materially adversely affects the market for the Bond, or the sale, at the contemplated offering prices, by the Purchaser of the Bond; or (viii) any documentation in connection with the issuance of the Bond shall not be satisfactory in form and substance to the Purchaser or its counsel; or (ix) economic, market or other conditions shall occur or exist which, in the judgment of the Purchaser, render, the Bond incapable of being sold on terms acceptable to the Purchaser; or (x) the results of any due diligence efforts by the Purchaser with respect to the proposed issuance of the Bond shall not, in the sole discretion of the Purchaser, be satisfactory to the Purchaser; or (xi) any suit, proceeding, litigation or other action shall be commenced, or, if commenced prior to the date hereof, shall be continuing or have been adjudicated, which, in any event, in the reasonable judgment of the Purchaser, may affect the marketing, sale or delivery of the Bond; or (xii) the Purchaser and the Issuer shall not have reached agreement as to the terms of any of the agreements referred to in this Agreement. D. At or prior to the Closing, the Purchaser shall have received the following documents (in each case with such changes as the Purchaser shall approve): The unqualified approving opinion of MSBT Law, Chartered, Bond Counsel, dated the date of the Closing, in form acceptable in all respects to the Purchaser. All fees of the Bond Counsel shall be the responsibility of the Issuer upon Closing. 2. A certificate of the Issuer, signed by the Mayor and City Clerk of the Issuer, dated the date of the Closing, to the effect that (a) the representations, warranties and agreements of the Issuer contained herein and in the Ordinance are true and correct in all material respects as of the date of the Closing; (b) to the knowledge of the Issuer without independent investigation, no litigation is pending or threatened (1) seeking to restrain or enjoin the issuance or delivery of any of the Bond, or the collection of revenues or other security pledged under the Ordinance, or (2) in any way contesting or affecting any authority for the issuance of the Bond or the validity of the Bond, the Ordinance or this Agreement, or (3) in any way contesting the existence or powers of the Issuer; and with respect to the Bond, the Ordinance or this Agreement. If the Issuer shall be unable for any reason to satisfy the conditions of the Purchaser’s obligation contained in this Agreement or if the Purchaser’s obligation shall be terminated for any reason permitted by this Agreement, this Agreement shall terminate and neither the Purchaser nor the Issuer shall have any further obligations or liability hereunder, except that any respective obligations of the Purchaser or the Issuer for payment of Bond Counsel costs and expenses incurred prior to termination of the Agreement, shall continue in full force and effect. 5. Reporting Requirements. The Issuer will be required to provide the Purchaser audited annual financial statements, free of significant deficiencies or material weakness, and prepared by an independent Certified Public Accountant, within 270 days of the close of its fiscal year. Additionally, the Issuer will provide Purchaser with a copy of its annual budget, as adopted or amended, within 30 days of adoption or amendment. 6. Wastewater Rate Covenant. The Issuer shall establish, revise, maintain, and collect charges sufficient, with other revenues received, after taking into consideration anticipated delinquencies, to provide system net revenues equal to not less than 1.25 times the average annual debt service on the Bond and all parity debt. 7. Additional Bonds Test. Additional bonds or other additional obligations payable from the net revenues on a parity with, but neither prior nor superior to, the lien of the Bond may be issued; provided, however, that before any such additional bonds or other additional parity obligations are authorized or actually issued the net revenues of the Wastewater system for the past twelve (12) consecutive months immediately preceding the year of the issuance of such additional bonds shall have been sufficient to pay the operation and maintenance expenses of the sanitary Wastewater system for said past twelve (12) months, and, in addition, sufficient so that the net revenues for such preceding year equal an amount representing at least 125% of the annual principal and interest requirements of the outstanding Bond, and any other obligations of the Issuer payable from the net revenues of the Wastewater system and the estimated net revenues of the Wastewater system for the twelve-month period immediately succeeding the issuance of the bonds or other obligations proposed to be issued will be not less than 125% of the annual principal and interest requirements of the Bond and any other obligations of the Issuer payable from the net revenues of the Wastewater system, plus the average annual principal and interest requirements of the additional bonds or other obligations proposed to be issued. 8. Notices. Any notice or other communication to be given to the Issuer under this Agreement may be given by delivering the same in writing to the addresses set forth above and any such notice or other communication to be given to the Purchaser may be given by delivering the same in writing to the Purchaser c/o ______________________. 9. Benefit. This Agreement is made solely for the benefit of the Issuer and the Purchaser (including their successors or assigns), and no other person, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. 10. Approval. The approval of the Purchaser when required hereunder or the determination of its satisfaction as to any document referred to herein shall be in writing signed by the undersigned and delivered to you. 11. Governing Law; Counterpart. This Agreement shall be governed by the laws of the State of Idaho applicable to agreements made and to be performed in the State of Idaho; without regard or effect given to conflict of law rules which would require the application of laws of any other jurisdiction. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. 12. Survival. All agreements, covenants and representations and all other statements of the Issuer and the Purchaser and their respective officers set forth in or made pursuant to this Agreement will survive the Closing and the delivery of and payment for the Bonds. 13. Severability. If any section, paragraph, clause or provision of this Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Agreement. 14. Remedies. Except as otherwise provided in the Ordinance, no right or remedy conferred on any party in this Agreement is intended to be exclusive of any other right or remedy. Each such right or remedy is in addition to every other right or remedy provided in this Agreement, the Bond Ordinance or by law. No delay or omission of any party to exercise any such right or remedy will impair any such right or remedy or be construed to be a waiver. Every such right or remedy may be exercised from time to time and as often as the relevant party may deem expedient. No waiver by any party of any right or remedy with respect to any Event of Default will extend to or affect any other existing or subsequent Event of Default. 15. Non-Merger. The provisions of this Agreement shall survive all other performances hereunder, and shall not be deemed merged in any deed or other instrument or document delivered hereunder. 16. Obligations of Issuer Not Obligations of Officials Individually. All obligations of the Issuer under the Bond Documents, the Bonds will be deemed to be obligations of the Issuer to the full extent permitted by the Constitution and laws of the State. No obligation under any of the Bond Documents will be deemed to be an obligation of any present or future officer or employee of the Issuer in his or her individual capacity, and no officer of the Issuer who executes the Bonds will be personally liable on the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. Purchaser as Purchaser herein specified By: Approved and Agreed to: CITY OF REXBURG By: Mayor Attest: ______________________________ City Clerk EXHIBIT A TO THE BOND PURCHASE AGREEMENT $_____________ PAR AMOUNT WASTEWATER REVENUE REFUNDING BOND A. Payment: B. Dated Date: June 22, 2020 C. Maturity Date: Final maturity is September 15, 2025. D. Reserve Requirement: None. E. Redemption: F. Covenants and As set forth in the Ordinance and this Agreement. Conditions: G. Estimated Closing Date: June 22, 2020, or such other date mutually agreed to by the parties to this Purchase Contract. H. Bond Counsel: MSBT Law, Chartered, Boise, Idaho. I. Method of Payment: Federal Funds draft or wire. J. 8038: Issuer shall make all necessary filings. K. Tax Exemption: An opinion from Bond Counsel that interest on the Bonds is excluded from gross income for federal tax purposes and the Issuer has designated the Bonds as “qualified tax-exempt obligations” pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of 1986. L. Interest Payment: Interest on the Bonds is payable with semi-annual payments of principal and interest due each March 15 and September 15, beginning March 15, 2021, until maturity. M. Closing Costs: The Issuer is responsible for paying the costs of its Bond Counsel. In addition, the Issuer will pay for the fees of the Bank, in an amount not to exceed _________________.